Are You Throwing Money Out the Window?
Picture yourself driving down the open road with a fist full of cash. You roll down the window to get some fresh air. Then you toss that cash right out the window! I know it’s dramatic but that is basically what you’re doing if you’re paying more on your mortgage than you have to!
If you have been following my blog over the past few months, you know that mortgage rates are at their lowest level in history! It is likely that most of you reading this right now will never see rates this low again in your lifetime! Some homeowners may not fully understand just how much money they could save through refinancing. They don’t think it is worth it, or maybe think it is a long drawn out process. Simply finding out if refinancing is right for you is easy and does not cost anything but your time. Not finding out could cost thousands!
I have worked with some clients who initially thought that refinancing wasn’t worth it because their rate was not that much higher than the current market rate. What they didn’t realize that with rates as low as they are, they might have the opportunity to shorten the term of their mortgage while keeping their payment close to what they’re paying now. In doing so, I have had clients save literally tens of thousands of dollars over the life of their loan!
Consider this scenario:
A homeowner who originally borrowed $192,000 at a rate of 4.625% 5 years ago would have an existing balance on their mortgage of approx. $175,350. Total interest over the life of the loan is approx. $163,373.
Today’s rate on a 20 yr fixed is 3.875% (APR 4.012%). If this homeowner refinanced in to a 20 yr fixed rate mortgage, their total interest (including the interest they already paid over the last 5 years) is approx. $81,569. There is a modest increase to the monthly principal and interest payment of approx. $79. However, over the life of the loan, this homeowner has the potential to shave 5 years off their mortgage and save over $81,000 in interest! Pretty amazing!
Restructuring your current mortgage vs. simply refinancing to a lower rate could provide you with significant financial benefits. If you’re wondering how much money you could save, the best thing to do is review your present situation with a mortgage professional. That’s where I come in. I will work with you to understand your current situation and provide you a detailed financial analysis of your mortgage options to determine if refinancing is right for you. Again, it doesn’t cost anything but your time, and the savings could be significant. What are you waiting for? Give me a call today!
Ed Harrigan - NMLS 235922
Your Mortgage Planner for Life!
Office (603) 447-6060
